XDD or eXtended Device Discovery is a mechanism that is use to discover devices on the network as they appear. It does this by listening for ARP requests that are boradcast over the network, and creates a cache of those devices sending these requests.

XDD will once it has identified a ARP request wait for 2 minutes and then an additonal random time and then ping the machine and query it to see if a LANDesk agent is present. If it finds an agent is present then it will discard the record, however it will report back any devices that do not to the UDD tool within LDMS.

You can also set XDD to review WAP (Wireless Application Protocol) calls also and perform an agent query also.

A scenario where you could use this would be to have a XDD agent installed at a remote site, and then it can monitor that remote site for devices that get added to the network there, and then report those devices back to your core. Saving you from having to have scans of the remote site done over its complete subnet and stop the traffic that would generate over your WAN links.

There is more information on this here in this document, (it states it is for 8.7, however it should give you a good idea on how this works.)